CES: The network is king

There's no slam-dunk to achieving a one-content-stream-fits-all-networks mode, however. For example, when it comes to distributing content in multicast mode, which delivers multiple simultaneous streams to end users from one file, cable has a specific way of accommodating the technology over its shared distribution network, and suppliers of DSL systems have others, Compton noted.

"People want to be able to write the instructions once and ensure delivery of their multicasts through the UBR (Cisco's headend-based Universal Broadband Router) or the DSLAM (the DSL access multiplexer at the central office)," he said.

The same holds for setting QoS parameters, where network equipment provides means of flagging and prioritizing different data types. To ensure distribution to all interested end users, no matter what type of access network they're using, requires that the industry sectors agree on a common means of communicating and triggering the QoS, multicast and other functions to the edge equipment that runs the access network portion, Compton said.

"We need to know how to tie things together without trying to homogenize the methods of operation in the access networks, where the operating functions are optimized form the specific architectures," Compton said. "The key question is, can we establish a common schema in directories for setting up multicast or QoS regardless of the access architecture."

Tying things together entails making use of the Internet addressing system known as Lightweight Directory Access Protocol (LDAP) to develop OSS (operations support system) solutions that will give service providers centralized control over provisioning of services, billing and network management. This is the goal of the Directory Enabled Networks initiative spearheaded by Cisco and Microsoft Corp.

This type of OSS, now entering the market from a handful of suppliers, provides the linkages between the basic IP address information of each user and virtually any type of application, starting with the initial installation and registration of a customer and extending to provisioning of specific services, billing and the customer care process. This integration allows service providers to more thoroughly automate operations and to scale their systems as the customer base grows.

Intertainer and Arepa represent a new class of IP-oriented content providers whose businesses depend on broadband access exclusively. Along with working with Cisco, the two companies are structuring an agreement between themselves that will allow Intertainer to make Arepa's network-distributed CD-ROM service available to its customers, said Terrence Coles, vice president of e-commerce and advertising for Intertainer. The Arepa technology allows users to access and interact with encrypted CD-ROM material as if the CDs were running on their computers, with no discernible degradation in interaction speed, Coles said.

Intertainer, which is undergoing market tests with Comcast Cable in Willow Grove, Pa. and US West in Denver, is building a portfolio of content, from movies-on-demand to highly interactive, Web-oriented fare like the Arepa service, in preparation for commercial launches starting in the second half of the year, Coles said. "We don't have any set plans for commercial launches, but we believe everything will be in place by that timeframe," he added.

The company locally stores and distributes 500 hours worth of content at a refresh rate of 20 percent per month from facilities in Culver City, Calif. Content is delivered in MPEG-1, making it eminently suitable for delivery over DSL platforms, such as the forthcoming G.Lite system, Coles noted.

Variations on the same theme abound. Even the reluctant-to-stream @Home Network, shooting for a "near VHS" full-screen video tier at 300 to 500 kbps, is building a national media streaming backbone that marks cable's first commercial foray into the emerging multimedia entertainment maelstrom. In another example, America Online, now teamed in DSL rollout efforts with MCI Worldcom's UUNet, Bell Atlantic and GTE in various markets, is preparing for the battle with plans to launch what it's calling "AOL TV" over dialup links.

All of these developments linked to data networking are setting the table for network service providers of all stripes, putting a premium on cable's ability to set a much higher performance benchmark for TV viewing, well out of the reach of the networking capabilities of its competitors.

Taking the long view, the news is very good for MSOs, assuming cable remains the primary conduit for DTV. But, for now, the gap appears likely to quickly narrow in favor of the multimedia data side, notwithstanding gains over analog TV quality that cable will make as it expands the subscriber base for standard digital TV.

This is because, even by the accounts of suppliers of HDTV sets, there is reason to question whether the initial target audience, namely high-end home theater buyers, will generate the early-adopter sales pace the sector needs to attain liftoff. Addressing the question at CES, Scott Baker, marketing manager for Hitachi Home Electronics Inc., suggested there's a Catch-22 in the push to HDTV, where direct-view sets based on CRT (cathode ray tube) technology can't be made large enough to exploit the advantages of HDTV, and other systems meant to be large enough are either too expensive or too deficient in quality to make the grade.

"To really take advantage of HDTV in the future, these pictures have to be large," Baker said, citing the failure of the Muse HDTV system to prove its value on smaller sets in Japan. "If you're typically sitting nine feet from your TV set, to see HDTV and appreciate all its resolution, that set's got to be at least 60 inches in diagonal."

But there are either quality or cost drawbacks to the plethora of large-scale HDTV systems on display at CES, Baker and others acknowledged. The most commonly-used technology, rear-projection CRT, relies on a set of three, seven-inch tubes delivering interleaved color spots instead of progressively scanned pixels, delivering a dimmer-than-optimal picture that may not meet aficionados' standards, Baker said.

Hitachi has developed nine-inch CRTs costing twice as much as the seven-inch CRT versions that generate much better pictures, Baker said. But this pushes CRT projection systems, already priced at the "low end" for big screens at anywhere from $8,000 to well above $10,000, into the same stratosphere occupied by next-generation systems.

In fact, even at the seven-inch CRT system price levels, there's a real opening for new types of display systems now inching their way toward the market, noted Bill Bleha, vice president of R&D for Hughes JVC Technology Co. Inc. For example, Hughes JVC is backing a rapidly evolving projection technology known as liquid crystal on silicon as a potentially low-cost means of bringing very high-quality, large-screen systems to market.

LCOS technology, which uses liquid crystal coated across the electrodes on chips to project pixels of colored light, is intrinsically low cost. "Even at the point of putting liquid crystal on single crystal integrated circuits, (it's) not taxing design rules, so we're able to take old generation (CMOS) equipment and make a silicon backplane that can drive a very high resolution display," Bleha said.

But there are problems to resolve that are likely to push introduction well into next year, Bleha added. Most significantly, while the low cost production process will lead to lower-costs per pixel than competing technologies, LCOS technology requires use of high-power lamps to enhance the power of the chip-generated photons to the point that they become high-resolution pictures on big screens.

"The lamp is not a very nice vehicle now, because either the color isn't right or the lifetime and costs aren't there, and the consumer is not used to having to change lamps as we are in the professional arena," Bleha said. "If there's a weak link in the system, it's probably the lamp technology."

Another promising alternative to CRTs, a 50-inch diagonal, wall-hangable, four-inch-thick plasma display, is now commercially available from Pioneer Electronics for a mere $22,000. While Bill Whelan, video product planner for Pioneer, insisted some consumers are willing to pay this price, he acknowledged the company does not know when the cost will fall to levels in the CRT range, which is deemed as high as it can get and still generate a meaningful market.

"Certainly, as economies of scale and manufacturing techniques advance, we will see cost reductions," Whelan said. "But it's really too early for us to make a prediction on the direction of the costs of the actual displays and making it available to a wider market."

On the whole, the message from CES was that the prospects for a slow-to-develop high-end market for HDTV, together with a looming free-for-all in interactive multimedia at the MPEG-1 level, leave broadband network operators little choice but to aggressively forge new business strategies targeted to digital media competition at the low end. Given the broadband media plans laid out by @Home, it appears this message has already registered among many major players in cable.